Cryptocurrency Exchange Review
Making Crypto Simple
The first thing you need in order to buy Bitcoin or any other crypto asset or sell cryptocurrency is a fully-fledged and compliant cryptocurrency exchange. Blockchain projects have boomed in the past decade or so, and this includes digital marketplaces for crypto purchases.
The increased accessibility of crypto platforms makes it quite a challenge to decide which one to use. Nowadays, almost all crypto exchanges have rebranded as international platforms, so choosing based on location doesn’t really narrow down your choice.
The idea of our exchange reviews is to help you familiarize yourselves with the crème de la crème among them. However, the aim is not only to praise such platforms, but to inform you of both their advantages and downsides objectively.
Today, we’ll be digging into Coinbase, one of the oldest and staunchest platforms for buying digital currencies.
Keep reading our guide to discover all of its features!
Coinbase was launched in 2012 which means it’s a veteran in the crypto industry. It’s an American-based platform founded by two software engineers and crypto enthusiasts, Brian Armstrong and Fred Ehrsam, headquartered in San Francisco, California. Since then, Coinbase has expanded its offices in Portland, New York, London, Dublin, and Tokyo.
In the following years, the platform turned into a leading global exchange in over 100 countries with over 43 million verified users enjoying its services and contributing to the $455 billion in trading volume so far.
At the start, Coinbase used to be a Bitcoin-only brokerage, but as cryptocurrencies were gaining in popularity, the platform added support for three more tokens available for purchase. However, their trading platform lets you trade with a variety of altcoins. Coinbase is a high-liquidity platform which is one of the main reasons why it’s backed by world-leading venture capital firms and individual investors such as Andreessen Horowitz, Union Square Ventures (USV) – who invested $5 million in Coinbase – and Ribbit Capital.
Bitcoin (BTC) and Other Cryptocurrencies
Coinbase has a strict Digital Asset Framework that assesses crypto assets based on several criteria including their performance, security, liquidity, and demand. As a result, the platform lets you purchase the four most popular digital currencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). However, based on your location, you might be eligible to trade other tokens too.
So, what kind of deposits are available to you?
If you live in the US, you can link your bank account and choose a regular ACH transfer that takes between 4-5 days or make a wire transfer that’s slightly faster (1-3 days). You can instantly purchase crypto assets with your debit card (Visa or MasterCard), while PayPal is only available for withdrawals. In most cases, if you want to use your card, you need to provide a photo of your ID.
UK customers can use the Faster Payment feature for both deposits and withdrawals that takes 1-3 business days to complete. Other than that, they can only use SEPA as a deposit method. For withdrawals, they can choose between PayPal and Instant Card Withdrawals. The same methods are available to European traders with the addition of Ideal/Sofort for EUR deposits.
In Australia, crypto enthusiasts can use Coinbase only as a buying outlet and purchase tokens with their debit cards. In Canada, users can buy crypto with debit cards and sell them through PayPal.
Trading Fees and Limits
Coinbase charges two types of fees: a spread and flat/variable percentage fee. The spread equals about 0.50% of the transaction amount but the price is subject to changes due to market price fluctuations and it might differ at the moment when the order gets executed.
The other fee is either a fixed fee or variable percentage fee and gets determined based on your location and the payment method you chose. This isn’t something you choose but rather Coinbase charges you with the higher one of the two. The flat fee schedule goes like this:
- A $0.99 fee if the total transaction amount is less than or equal to $10.
- A $1.49 fee if the total transaction amount is more than $10 but less than or equal to $25.
- A $1.99 fee if the total transaction amount is more than $25 but less than or equal to $50.
- A $2.99 fee if the total transaction amount is more than $50 but less than or equal to $200.
On the other hand, the percentage fee in Australia and Canada is 3.99%. In Europe (including the UK), standard buys/sells incur a 1.49% fee, debit card purchases cost 3.99%, while bank transfers are free. For US customers, ACH transfers are free while wire transfers cost $10.
As far as limits are concerned, you can’t deposit more than $25,000 via ACH transfers. Although Coinbase doesn’t limit withdrawals to fiat wallets, they might be dependent on the payment method itself.
Coinbase gives you a couple of options for storing your funds. When you buy crypto assets, you can link your account to an external wallet address that you’re using already or you can ask Coinbase to generate a wallet address for you and store your funds temporarily. Alternatively, you can keep them in the separate Coinbase Wallet.
Coinbase Wallet is a non-custodial digital wallet designed by Toshi Holding Ltd. and owned by Coinbase itself. It’s downloaded as a mobile app and functions independently from your Coinbase account. Actually, you don’t need a Coinbase Account to use this wallet at all. The difference is that if you store your funds on the platform, Coinbase takes responsibility to protect your funds from cyber thefts.
If you’re using Coinbase Wallet, on the other hand, it’s your responsibility to keep your private key safely stored on your device. This wallet has multi-coin support, meaning you can store BTC, ETH, BCH, ETC, LTC, and ERC-20 tokens. The software is protected with Secure Enclave, a popular secure compressor with a hardware key manager separate from the main processor which reduces the risk of cyberattacks.
The platform’s success encouraged its founders to branch out and create an advanced trading platform for more experienced users and corporate traders. Therefore, in 2016, they created GDAX, short for Global Digital Asset Exchange, which was later rebranded as Coinbase Pro.
Whereas the original Coinbase platform has a slick but basic interface that appeals to beginners, Coinbase Pro received a completely revamped design with state-of-the-art trading options, tools, and indicators. Users have access to a larger number of trading pairs and are able to trade crypto assets against three fiat currencies: USD, EUR, and GBP. You can trade BTC, ETH, BCH, LTC, 0x (ZRX), Augur, Basic Attention Token (BAT), EOS, Ethereum Classic (ECH), Stellar (XLM), Ripple (XRP), ZCash, etc. On top of that, you can execute advanced order types such as limit, stop, kill, and cancel orders.
This platform is best-suited for professional high-volume traders who can execute large orders thanks to Coinbase Pro’s liquidity without disrupting the market. However, the trading fee for retail traders is quite higher than the average. Accounts with monthly trading volumes of less than $10,000 are charged 0.5% per transaction.
Coinbase has been known and praised for the high level of customer support it provides to its users. If they have some doubts and queries, customers can reach out to the platform by sending a support ticket via email or chat with the support bot that’s available 24/7.
In case they suspect their account has been compromised somehow, they can call the Coinbase Support phone number and ask them to freeze their account immediately. The numbers you can use are: +1 888 908-7930 (US/Intl), 0808 168 4635 (UK), or 1800 200 355 (Ireland).
Another great thing about Coinbase is that its team always takes into account the customers’ feedback. For example, during the past few months, the Bitcoin rally has increased not only the number of customers but also customer queries and Coinbase has had trouble answering all of them.
However, the VP of Customer Experience has been quick to issue a statement and apologize for the delays customers have been experiencing, promising they’ll do better. He informed them Coinbase has expanded its support team and added more self-service options in the Help Center among other novelties.
Is Coinbase Safe to Use?
Not many platforms in the world of cryptocurrency can boast of such a strong security system as Coinbase can. First of all, the platform is registered as a Money Services Business with FinCEN. Next, it has Money Transmitter Licenses in several US states and complies with the Bank Secrecy Act. On top of that, the funds of US customers are eligible for FDIC insurance up to $250,000.
To protect its company, Coinbase performs criminal background checks on all its employees. It uses strong encryption mechanisms (AES-256 SSL) and stores over 95% of the funds in cold storage, separating customer funds from operational funds. New account users are required to perform a KYC test and provide a photo ID.
Account-wise, Coinbase checks whether its users choose strong enough passwords and then hashes them to store them as encrypted codes. Coinbase users are encouraged to activate two-factor authentication (2FA) and use a mobile authenticator app to generate one-time passwords. In addition, customers can create a withdrawal whitelist and restrict the right to request withdrawals to only certain recognizable IP addresses.
Frequently Asked Questions
What is the best crypto exchange in the US?
First and foremost, a decent cryptocurrency exchange that operates on the US market is one that complies with the country’s financial regulations and AML policies. Several global platforms have already excluded US customers or had to create separate US-compliant subsidiaries to adhere to local frameworks. From the start, Coinbase has worked with great dedication and transparency which is why it earned its US work permit and it’s recognized as a Money Services Business by FINCEN.
How can you buy Ethereum on Coinbase?
If you want to purchase Ethereum, follow these steps: sign in to your Coinbase account, choose “Buy” from the upper right-hand corner and choose ETH. Enter the amount you want to purchase and the currency you want to pay in. Choose the payment method and click “Preview Buy” to double-check the information before you confirm your purchase. Coinbase also gives you the option to turn this order into a recurring purchase to save time on future buys.
What countries does Coinbase support?
Coinbase is an international cryptocurrency exchange available in over 100 countries around the world, including 18 countries in North America (plus the United States), 9 countries in South America, 41 countries in Europe, 20 countries in Asia, and 13 countries in Africa, as well as New Zealand and Australia. In some of these countries, you can only buy or sell crypto assets, in others, you can trade them as well. Visit the Coinbase Supported Places page to check the services available in your location.
What payment methods does Coinbase support?
In “Payment Methods” under Settings, Coinbase lets you add the payment option that works for you best. You can link your bank account for ACH transfer, your debit or credit card, make a wire transfer, use PayPal, SEPA, instant card withdrawals, Ideal, or Sofort. Different methods are available in different locations.
Does Coinbase have a mobile app?
Yes, Coinbase has a mobile app that can be downloaded from the App Store or Play Store for iOS or Android devices. This app has all the main features available via the web-based Coinbase platform. This means you can link payment methods and make deposits to your account, buy or sell assets, access market data, Coinbase’s FAQ section, and customer support. Some users claim it’s even more user-friendly than the website itself. The Coinbase app is different from the Coinbase Wallet App.
Does Coinbase provide a cryptocurrency wallet?
Yes, Coinbase offers a wallet app that can function separately from your Coinbase account. You can either download it to your device or access it from its web-based interface. The Coinbase wallet is user-secured, meaning that it’s your responsibility to keep the private key to your coins someplace safe. If you’re already using another wallet but want to switch to the Coinbase one, you can do that simply by transferring your private key. However, regardless of the security methods incorporated into the wallet, online or software wallets are still less safe than hardware ones.
Summing It Up
You can definitely see why Coinbase is so popular with traders around the world. There’s the great choice of cryptos and payment methods, reasonable fee schedule (except for card payments which incur pretty high fees), custodial services, advanced trading platform, etc. Above all, customers enjoy a sense of security and feel as though they, their queries, and their demands have been taken into account by the Coinbase team. Therefore, we definitely believe that Coinbase is worth trying out.